It’s pretty much a given that the new rules will require truth in advertising and clear disclosures written in plain English. Where things get muddy is with the single word “abusive” which has been added to the new law that deals with deceptive advertising. Advertising Age quoted Dan Jaffe, exec VP-government relations for the Association of National Advertisers as saying;
“‘Abusive’ means something over and above what has been unfair and deceptive in the past. It’s a much more elusive concept, and it’s going to have to be parsed out by the regulatory agencies — and also by the courts.”
The article goes on to suggest that abusive may apply not just to liberties taken in a particular ad, but to a company’s entire way of doing business. How that call will be made and who will make it hasn’t been defined by the agency.
The bottom line is that changes are coming. Dick O’Brien, exec VP-director of government relations for the American Association of Advertising Agencies said;
“The intent of the new law is to prevent bad guys from doing bad things — companies who dupe the public in order to take advantage of them. If you’re an honest company who can deliver on your promises, then you should be OK.”
But the reality is that the new rules could be so complex and could require so many provisions to be met that it will become too expensive to produce an ad that meets all the requirements and is still effective. Add to that the uncomfortable feeling of not knowing where the line is that you can’t cross and that’s bound to have an effect on ad spending in this sector.
In addition to policing financial advertising, the new agency will also oversee electronic funds, debt collection, credit reporting, fair credit and just about any other consumer financial service with the exception of insurance and auto loans.
For more information about the battle over who will lead the charge, read this article from the Sunday LA Times.